Importance of Sound Industrial Relation System
The success of any organization depends on its employees. Good and harmonious relationships between employers and employees (Industrial Relations) are vital to existence, stability and growth of any organization.
As per the Edwards (2003) any practices, processes, procedures and channels of communication maintained or practiced between employers and employees (represented by trade unions) in order to have cordial relationship among the parties.
The three main parties involved in the IRs have conflicting interests.
EMPLOYER - Wants higher profits on his investments
EMPLOYEE - Wants more wages and better conditions of work/life
GOVERNMENT - Wants Industry to provide more employment and receive bigger income as taxation to provide services to the general public.
Role of the government on Industrial Relations:
(A) By Enforcement of Labour Laws (Control/Protecting Role):
1) Industrial
Dispute Act (# 43 of 1950)
2) Trade
Union Ordinance Act (# 14 of 1935)
3) Termination
of Employment of Workmen (# 45 of 1971)
4) Factories Ordinance (# 45 of 1942)
(B) By Preservation of Industrial Peace (Facilitating Role)
1) Collective
Agreements
2) Conciliation
3) Arbitration
Handling Industrial Disputes:
Maintaining a healthy relationship with the employees/trade unions on labor related issues and proper grievance handling procedure would certainly help the organizations to minimize and avoid the industrial disputes, since peoples problems are timely and properly handled by the management. If not grievances can become conflicts, disputes and ended up in becoming an industrial dispute.
Industrial Dispute Act ( Act No 43 of 1950) provides several methods for the settlement of Industrial Disputes. Methods include:
1) Conciliation - The Commissioner General or the Authorized officer calls up the parties to the disputes and endeavors to effect a settlement.
2) Arbitration – An arbitrator shall make all inquiries in to the dispute, hear such evidence and make such order which is just and equitable. The order is binding on the parties and shall become implied terms of the contract. The arbitration can be voluntary or compulsory
3) Industrial Court - A matter comes before an Industrial Court only where the Minister of Labour refers an industrial dispute to it. The court is required to make an award, which appears to be just and equitable.
4) Labour Tribunals - Have jurisdiction to inquire Termination of a workers, Gratuity or other benefits due to a worker from his employer on the termination.
5) Collective Agreements - An agreement between an employer or employers and workmen or trade union relating to terms and conditions of employment or to the privileges, rights or duties of employers or to the manner of settlement of disputes.
6) Collective Bargaining - This is universally accepted as a voluntary mechanism to solve conflicts without the intervention of a third party. Collective bargaining is a compromise between the conflicting power groups of capital (Employer) and labour. The rules are laid down and derived from joint decision.
Benefits of good Industrial Relations:
- Productivity is
significantly impacted by having a good working environment
- Maintain & improve
peace, stability & harmony in organizations, industry and in the
society
- Can find ways & means
of preventing, minimizing, & resolving conflicts and disputes.
- Have concern & interest
in employees
- Reduced absenteeism &
turnover
- Help employees achieve personal
goals
- Improved morale, loyalty
& productivity
- Employees provide their commitment
Consequences of Poor Employee Relations:
- Low
job involvement
- Excessive
absenteeism patterns
- Low
employee morale
- Poor
judgment & bad decisions
- Unusual
on-the-job accidents
- Wastage
of resources
- Low
efficiency & Low effectiveness
- Damages
to properties
- Low productivity
Conclusion
A sound industrial relations system is one in which the relationships between the management and employees on the one hand and between them and the state on the other are more harmonious co-operative than conflictual. The system should create an environment conducive to economic efficiency, motivation, participation, productivity and development of the employee, and should generate employee loyalty and mutual trust. It should raise the living standards of employees through a fair, sharing of the gains of economic activity. Efficiency and quality depend to a great extend on a motivated workforce. The quality is about the people and not the products.
References
Armstrong, M. (2006). A Handbook of Human Resource
Management Practice. Kogan Page Limited.
Edwards, P. (2003). Industrial relations Theory and
Practice. Blackwell Publishing.
As discussed, good industrial relations will be important in maintaining a positive work environment. Employees will be more happy and relaxed and hence be more engaged. This will improve productivity levels. Good article Amila.
ReplyDeleteIndustrial relations are intended to foster mutual trust and good working relationships between employers and their employees, as well as other related parties. This is for the benefit of both the employers and the employees. It is also beneficial to the industry's and economy's overall growth. Good Luck.
ReplyDeleteIndustrial relations usually imply positive and good relations between the employees and employers. The better industrial relationship ensure the long run of an industry effectively and successfully.
ReplyDeleteYou have chosen an important topic and this is a property explained article. Good job Amila..
Industrial relations are meant to establish mutual trust and good working relationships between employers and their employees, as well as other stakeholders. Both employers and employees will gain from this. It is also advantageous to the general growth of the industry and economy. Good article.
ReplyDeleteAs discussed, Maintaining a nice working environment will require solid industrial relations. Employees will be more engaged as a result of their increased happiness and relaxation. This will boost output. Both employers and employees will gain from this. Good Article
ReplyDeleteAs previously said, excellent labor relations will be critical to sustaining a happy work environment.
ReplyDeleteEmployees will be happier and more comfortable, and hence more engaged.
This will help to boost productivity.
As you defined relationship between employer and employee is called industrial relations. It is clear that without good and strong employee relations achieving organizational goal will not be easy. To achieve sustainable organizational performance it is very important to maintain good employee relation. Otherwise it will causes employee turnover and poor organizational performance. You have explained the government intervention on the industrial relations with related law and regulation with in the country. Very important article. All the best.
ReplyDelete